Translation:

2. It is He Who has created you; and of you are some that are Unbelievers and some that are Believers: and Allah sees well all that ye do.

Notes (Tafseer)

5480. It is not that He does not see Rebellion and Evil, nor that He cannot punish them. He created all things pure and good, and if evil crept in by the grant of a limited free-will by Him, it is not unforeseen: it is in His wise and universal Plan, for giving man a chance of rising higher and ever higher.